As SNCF Loses Its Public Focus, the Future of French Rail is in Question

» As Europe pushes competition in the railway sector, the role of the public enterprise slowly fades away.

The first threat came earlier this year, when French national railway operator SNCF signaled that it was considering cutting some TGV high-speed train routes between the nation’s regional capitals. Facing increasing track use fees and the economic recession, one in five TGV services now lose money, and SNCF seemed ready to stop operating direct services from Bordeaux, Nantes, and Lille to Strasbourg. Many people hoping to travel from destinations in the eastern part of the country to the west would have to transfer in Paris.

Still under the control of the French government, however, SNCF announced that no TGV services would be cut, and that the rail company would have to find ways to increase ridership or cut services elsewhere. For regional officials across the country, this was a relief, a sign that the nation’s rail transport would continue to serve as an engine for universal mobility, not simply for the movement of Parisians.

Yet with European regulations altering the role of the public railway across the continent, the decision the SNCF almost made no longer appears like an aberration — rather, it probably will be the future norm. That’s because European regulators, focused on increasing competition in areas of former public monopoly, have asked SNCF to abandon its public enterprise status by July 2010, or the French government will be penalized for handing out an illegal subsidy. With France’s formerly publicly owned gas, electricity, and aviation companies now private, the pseudo-privatization of SNCF would be just another example of the liberalization of trade in what can only be described as a now market-obsessed Europe.

With none of the public and political pressure to maintain high-speed service between regional capitals, SNCF seems likely to move away from any operations that aren’t money-making once it separates fully from the public envelope. The result will be a general decline in service along less-used routes — a depressing outcome for a system that has developed so well over the past few decades.

Because of decrees by the Brussels-based European Union, France no longer has the ability to make independent decisions about how to operate its railways but instead must follow free-competition rules supposedly designed to improve the efficiencies of the railway market and reduce fares for customers. This represents major a change, especially in France.

The rail network was once operated under public monopolies across Europe, with national operators controlling each individual market and international routes the subject of intense negotiation and agreements between countries. This system had a number of benefits, notably in France, where SNCF was conceived as a service providing more than simply transportation, but also societal equalization, befitting its designation as a public enterprise. The company has reduced fares for children, young adults, seniors, and large families — as a matter of social concern. The operator offers high-speed tickets at cheap prices compared to comparable services in Germany, Spain, or Italy — a policy that has resulted in highly frequented TGV trains and a general equality in train service for people of all income classes. There are no slow, poor-person trains on routes where TGVs are offered.

The lack of competition also allowed SNCF to transfer profits from its TGVs to subsidize Corail routes, which provide national intercity services on routes that don’t yet offer high-speed trains.

But the success of the SNCF in running the French railway network has not been adequately appreciated by European officials (or by conservative French President Nicolas Sarkozy), who have made a conscious decision to emulate the British rail system, which has been open to competition since 1994. That network, in which track ownership (sometimes public, sometime private) is separated from private train operations, has extensive failings. An effort to use public-private partnerships to construct the United Kingdom’s first high-speed line resulted in a bankruptcy in which the state had to bailout the creditors and take the losses. The recession pulled several private operators out of business, leaving the state to take command of several money-losing routes.

It’s hard to see the British example as anything other than a racket designed to transfer profits into the private sector and force the public sphere to absorb losses. And yet European officials are adamant that the continent’s more successful rail systems follow in its example.

France made the first step in that direction in early 1997 with the creation of the public Réseau Ferré de France, which took control of the nation’s rail network from SNCF, leaving the company involved in operations alone, paying RFF for the rights to use tracks and opening the way for competition from other companies. This allowed SNCF to make large profits, since it was no longer required to take on debt for the construction of expensive new rail lines. But the creation of RFF immediately established a conflict of interest between operator and track owner: one is intent on paying back the costs of high-speed lines, whereas the other has pursued a socially equitable policy in the distribution of transportation resources.

As a result, RFF has been increasing track use fees significantly over the past few years. As a bureaucrat at SNCF put it: “We’re stuck: we’re asked to make money. But the tolls paid to RFF to run TGV services keep going up. At the same time, we’re asked to keep running trains, even when they lose money.” Between 2005 and 2013, RFF will increase SNCF track fees from €1 billion to €2.2 billion, enough to destroy the operator’s profit and eventually push it into bankruptcy unless the government comes to its aid — unlikely considering European regulations. RFF, meanwhile, made a profit in 2009.

At the same time, SNCF faces increasing competition from private and foreign operators that plan to make a play for the lucrative French market beginning as early as this year. They are expected to be able to offer competitive services because their employees lack the employment protections and good pay SNCF workers have earned after years of negotiations and strikes. That said, these competitors will have significant start-up costs, including the not-exactly-cheap purchase of new high-speed trains.

The French government has made a commitment to aid the company whose days as a public protectorate seem short-lived. Money-losing Corail trains, which cost SNCF €150 million a year, are to be contracted out to SNCF by the state, similar to the way the TER regional rail operations are now run by each of France’s 22 regions. This will make the company’s only non-governmental services the TGV lines.

Because of the RFF’s high track fees, a newly profit-motivated SNCF is likely to abandon corridors that are marginal, including those region-to-region routes that almost saw the axe this year; most TGV services seem likely to be relegated to routes with destinations in Paris, Lyon, or Marseille, the country’s three biggest cities. This in spite of the fact that many peripheral regions expected to see declining services contributed directly to the construction of new high-speed lines. But now that RFF and SNCF have completely opposing motivations, it doesn’t matter, since track construction ownership is separated from operations. Regions can no longer assume service expansion to be the expected result of investing in new routes.

In addition, SNCF seems unlikely to continue offering the deep discounts to the young and old it can currently provide, since it will now be focused on providing more expensive profit-building business trips between the country’s biggest cities, routes that will face increasing competition from other operators in the future. If those benefits are to be extended, they will have to be subsidized by the state.

In many ways, these new European regulations put into question the French model of social equity in rail services; the manner in which competition is being pursued will fundamentally transform the role and goals of the SNCF. It’s difficult to conceive of a way in which this will produce general improvements in service for the country’s population.

Image above: Paris’ Gare de Lyon, from Flickr User Nojhan, under a CC 2.0 License

35 Comments | Leave a Reply »
  • dist

    Quite a good post Yonah.

    The problem here is that when RFF was created it inherited SNCF huge debt (€ 28 billion) and it now struggles to keep its head out of the water. Increasing tolls was certainly a good idea but I think they (RFF and the french Governement) took this a bit too far.

  • David

    “It’s hard to see the British example as anything other than a racket designed to transfer profits into the private sector and force the public sphere to absorb losses.”

    Yes… that’s got to be it. It couldn’t have been a never-before-attempted experiment in national rail system management and organization to attempt to address major deficiencies in the existing publicly-owned rail system based loosely on how networks such as the electricity network are funded and operated as well as how toll roads work… no siree, it has to be a racket.

    It’s one thing to claim it wasn’t a good idea, or that the experiment has not lived up to expectations, or that it was ideology trumping common sense, or whatever, but to come out and declare that it was designed as a racket is over the top. That’s especially the case since there weren’t profits to transfer anyway and the public sector was already bleeding red ink – the entire point of this experiment was to find a way to stop the losses that the public sector was incurring.

    As for the French, as the first poster indicates, the flaw in the way they’ve organized things seems to be with the fact of dumping the construction debt onto RFF and trying to force it to recover those funds rather than just letting it own the network as a regulated monopoly with the state assuming the debt. One also has to question the viability of TGV between sub-million population centres

    • David –

      Thanks for the comment, point taken. But I should articulate that when I was arguing that the British situation was a racket, I was referring to the decision by European officials to emulate it, not the initial decision to go forward with privatization.

      My point was this: now that we know the failings of the UK system, with privatized operations and semi-privatized track rights, why imitate it? After all, it appears to be more in the interest of promoting business interests than public well-being, considering the negative consequences.

      Meanwhile, I agree that the RFF structure is inherently problematic because of the reasons that you listed, but I don’t see specific reasons why TGV service shouldn’t be viable between sub-million population centers, as you put it. In fact, most of the lines considered for cancellation would be “profitable” if not for the high RFF track fees. Now that SNCF is being de-public enterprised, however, most of those routes will likely be dead in a few years.

  • dejv

    Yonah,

    I strongly disagree with your point, that compliance with new rules and restructuring old SNCF into RFF and new, “competitive” SNCF was direct cause of these unwelcome changes. The new system can retain features of old system – if there is political demand to do so:

    * RFF may prioritize awarding paths for trains ordered by state or regions over paths for fully private trains

    * the state and regions can tender these operations with amount of subsidy or revenue being most important factor in awarding the bid.

    * the tenders can set other conditions for bidders, like fare structure, trainset parameters, operator-caused delays etc.

    This is perfectly doable way of public control of the structure of service and fares while retaining profits from profitable operations for subsidizing lossy ones and keeping actual operations as efficient as possible thanks to private companies competing for services.

    The fact that french politicians decided otherwise was driven by other factors, like desire to get rid of old railway debt and construct new LGV’s without having to pay it from public budget.

  • RFF is a public entity, which the government can pressure to lower track access fees. What the government is not allowed to do is have RFF give preference to SNCF over DB or the TAV.

    More to the point: what’s the point of province-to-province HSR, anyway? It’s not mobility – France is among the least mobile countries in Europe. It doesn’t have much useful rail infrastructure in the provinces. Compared to Germany, France has invested in world class HSR but neglected regional rail, outside Paris, Rhone-Alpes, and PACA. The RER is great, but the provincial TER networks have nothing on any German-speaking S-Bahn, or on the Geneva RER.

    • Chris Burton

      Alon is closest I suspect to the real problem: TGV has been built too often with persuasive political pressure but near non-existent business case. This money might have been more effectively spent upgrading heritage infrastructure.

      Also, was RFF formed with a commercial plan to operate more efficiently and pass on fiscal benefit to SNCF? If so, what were the incentives? Trackwear is serious in every country, hence the UK Dep.for Trans’ getting serious about lighter trains, always allowing for the power/adhesion ratios. Maybe the rest of Europe should be too.

      As for RailFret: only a government would ‘donate’ E7billion to a freight company which has shown a congenital inability to be thoroughly commercial over many years of operation.

      Chris

  • Chris

    There is also another big problem I see with the move towards privatized public transport, that is that it ignores the theory of networks. That is that they do work best as monopolies, because it facilitates smooth connections and greatly increased coverage.

    Back in the mid to late nineties all the ideologues who wrecked Britain’s rail system moved here to Melbourne and set about destroying our urban public transport. Because they were obsessed with competition they broke the system into modes. One company effectively owns, plans (supposedly) and runs the trains and about another 50 the buses (last time I checked). The consequence is that you can’t make a connection from bus to rail and the whole system is just useless as a result.

    • Chris, what you describe sounds a lot like how public transportation works in Tokyo, Osaka, Seoul, and Singapore.

      • Nathanael

        You know, correct me if I’m wrong, but I’ll bet that every one of those “private” companies has to go through government to get any new track alignment or station locations approved, and I’d expect that the government micromanages the process to make sure the system is sufficiently integrated for its liking.

  • Andrew in Ezo

    Can’t comment about Seoul or Singapore, but in Japan, it helps that there is a long tradition of private railway and bus companies, nearly all having associated real estate and retail businesses. It is in their interest to feed passengers into their stations efficiently, as development is also centered around the stations. Convenient connections also provides an incentive for people to make more journeys by rail and shop at end-point destinations. Finally, culturally, Japanese have low tolerance for poor urban public transport, and people aren’t enamored with the anglo-saxon obsession with privitizing everything.

    • Singapore doesn’t quite work this way. I mentioned it because it has two transit companies, one running most of the buses and one subway line and the other running the other bus and subway lines.

      While most of Singapore’s malls cluster near the Orchard stations (Orchard, Somerset, Dhoby Ghaut), many of them were built before the subway; the subway was built to serve the shopping centers, not the other way around.

      The convenient connections in Singapore are mainly bus-subway. The subway has absurdly long interstations, but the buses work well; in some respects, the entire bus system is run as BRT (it has off-board fare collection, and there are so few cars that the lanes are free-flowing).

  • DBX

    We knew the failures of the British system at the time it was privatized, and they have only grown more evident. Government subsidies have soared since privatization — they are about triple in real terms what they were before — and you have a manifestly dysfunctional and micromanaged governance structure that stands in stark contrast to the relatively independent British Railways Board. Train operating companies must lease their rolling stock, not own it, from companies directly controlled by investment banks; the government in practice ends up buying the new trains; franchises are short-term and for the first time in Britain’s history government bureaucrats are involved in day to day operating decisions of the railroads.

    British Rail managers were actually quite open to the idea of privatization. But their idea of privatization was as a vertically integrated operation; something like then-Prime Minister John Major’s idea of reviving the “Big Four” of the pre-1948 era. The Treasury, however, had a fit, and basically demanded this absurd, fragmented, franchised cash cow for investment banks. And Major caved in, at what turned out to be great cost to the taxpayer and the traveling public. Subsidies soared; and the three year deferral of any investment during privatization put most of Britain’s railcar industry out of business and broke what had been a long trend of increasing ridership (that trend line has at least been reattained after several years). The only winners other than the investment banks have been the rail unions, whose members’ wages have gone up considerably. It is utterly extraordinary and tragic that the British Treasury’s wrong call in 1992 is turning out to be the blueprint for the European Union.

    There was a time, in the 1980s, when having “British Rail” on your CV was an automatic ticket to bigger and better things in management — the company had a good reputation for doing a great deal on a shoestring. That certainly isn’t true now of British railroading, other than freight, which eschewed the franchising model and is as vertically integrated as can be other than not owning its track.

    • dejv

      It is utterly extraordinary and tragic that the British Treasury’s wrong call in 1992 is turning out to be the blueprint for the European Union.
      It is one of possibilities allowed by EU regulations. The other are:

      * setting up transit agency run directly by regional governments (the same way the city transit agencies work)

      * long-term tendering of train operations allowing private operator stable enough incomes to get loans for new rolling stock

      The latter works very well in regional rail in Germany while the former is evaluated by state of Lower Austria for lines that ÖBB refuse to operate.

    • Andrew In Ezo

      “British Rail managers were actually quite open to the idea of privatization. But their idea of privatization was as a vertically integrated operation; something like then-Prime Minister John Major’s idea of reviving the “Big Four” of the pre-1948 era.”

      Which is essentially what happened with the breakup of the Japanese National Railways into 7 operating companies (6 by region, and one freight). The JR Group is often cited as an example of the right way to privitize a debt-ridden national rail network.

  • Chris

    “Chris, what you describe sounds a lot like how public transportation works in Tokyo, Osaka, Seoul, and Singapore.”

    Little bit different because public transport does actually work in these cities.

    I’m guessing the difference will be a planning organisation of some sort to co-ordinate services, but Melbourne doesn’t have one of these because of the anti-planning pro-competition ideology. My understanding is that many of the regional systems mentioned are government monopolies which then essentially have private sub-contractors.

    • No, in Tokyo and Osaka all non-subway services are owned and operated by multiple private companies, many of which built their own lines (but JR East and JR West, each accounting for about half of non-subway ridership, used to be government-owned). In Singapore the government decides where to build subways, but the two public transportation companies decide their own bus routes; the dominant ideology in government is exactly pro-competition and often anti-planning.

  • John Bredin

    I’m a bit unclear on this “illegal subsidy” thing. Am I gathering correctly from the rest of the article that it doesn’t violate EU rules for a national or provincial government to directly pay SNCF (or some other rail operator) to operate an unprofitable service but it would violate the EU anti-subsidy regulations to allow SNCF to use profitable lines or services to cover the losses from unprofitable lines?!

    Because that would be completely bass-ackward! If you have NO profitable lines, then a government subsidy has to come in somewhere, if for no other reason than the highways are directly taxpayer-financed (level playing field and all that). But IF you can operate without a direct cash subsidy (or a reduced one) by shuffling money between lines, on the logic that the unprofitable lines are still feeders & distributors for the profitable ones, then isn’t that better?!?

    • Well, it’s pretty much going to work like this: Operators like SNCF are going to get the chance to bid for line operations, but theoretically no one’s going to be forced to operate any specific service. This means that private/semi-national operators are going to choose only to operate profitable lines, or ones that are subsidized.

      It doesn’t mean that it would be illegal for SNCF to cover the losses on unprofitable lines with profits from elsewhere, it’s just that it won’t have the motivation to do so anymore, since it is slowly losing its mandate as the national rail carrier working in the public interest.

      • dejv

        It doesn’t mean that it would be illegal for SNCF to cover the losses on unprofitable lines with profits from elsewhere, it’s just that it won’t have the motivation to do so anymore, since it is slowly losing its mandate as the national rail carrier working in the public interest.

        This is certainly good model but the redistribution shouldn’t be at one mode operator IMO. If the incomes from profitable lines go to regional transit authorities, they can choose to subsidize parallel buses, that can run much more frequently and service village centers for the same costs as infrequent train service. Combined with fare integration, such model delivers much better service for the same amount of public money, something impossible for single mode operator subsidizing only its own services.

  • Tom West

    Important point about the British railway system: despite all its many problems, rail passenger levels in Britain have grown faster since 1994 than in any other country in Europe. (I don’t know about non-European countries).

  • Max Wyss

    @dejiv: We are here talking of unprofitable long distance services, not regional ones. The French regional services are all ordered and supported by the régions, and if there are profits, they would remain within the région.

    The long-distance services talked about are something like Lyon – Nantes, for example (which are currently about 2 trains per day, now operated with pretty measly DMUs.

    • dejv

      We are here talking of unprofitable long distance services, not regional ones.

      OK, then the redistribution of profits can be done by RFF (subsidizing track fees on lignes classiques) or french Department of Transportation. The blame of former operation model destruction is on french politicians, not EU regulations.

      The long-distance services talked about are something like Lyon – Nantes, for example (which are currently about 2 trains per day, now operated with pretty measly DMUs.

      I could find only three pairs of non-TGV trains weekly. One pair of sat/sun overnight trains and two pairs of weekend daytime trains.

      Direct TGVs aren’t much frequent either. Most TGV connections require transfer in Paris, that imposes only 45 minute time penalty, despite requiring one hour to move between Gares du Lyon and Montparnasse. The expensive but efficient way to improve such interregional connections is extension of LGV Atlantique to Gare de l’Est and LGV PSE to Gare du Nord (or vice versa) and to interconnect Gares du Nord and de l’Est to work as single station for passengers. This way, there can be huge improvement in interregional mobility while reinforcing most-heavily used regions-to-Paris connections.

      • Montparnasse is exceptionally hard to get to from other stations, because of the lack of RER connection. Part of the problem is that the Montparnasse commuter network serves the same direction as the Saint-Lazare network, so SNCF doesn’t want to connect the two stations by RER.

        With Lyon-Nord connection, it’s easier – just take the RER D.

      • dist

        @dejv

        One hour to move between Paris’ gares? No way. It can be done in less than half an hour. Paris is very small and the gares are all located in the inner-center with plenty of connection.

        To go to Montparnasse from gare de Lyon you can take the M1/M14 (or even the RER A but the interchange is not so great) and then took the M4. You should be at destination in 20 min or so. You can also onsider crossing the Seine to Gare d’Austerlitz (2mins by foot on a very pleasant bridge), take the M5 and then the M6 at Place d’Italie if you want a scenic tour. But it will be a tad longer.

        To go to Gare du Nord or de l’Est (they are not very far apart) you can take the M5 or the combo M1/M4 or M14/M4. or even spice things up with the RERs (RER D or RER A/RER B).

        To go from gare du Nord to gare de l’Est just took the M4. Once again, you’ll need around 20 minutes.

        There is no need of subteranean LGVs in the middle of Paris. The cost is too high for the awaited advantages.

        @Alon:

        Montparnasse is not exceptionnaly hard to get from other stations. The metro network is very effective and some times even more than direct RER lines. That’s especially true when you compared RER lines to the M1 and M4.

        Montparnasse and St-Lazare commuter network could be connected together but it will be very costly and not all necessary. The M12 & M13 are not to capacity on this trek. However, a very small part of those stations’ commuter network overlaps. This is clearly not a priority and maybe a Gare du Nord/Gare Montparnasse connection could be more interesting to build than a Montparnasse/St-Lazare connection. It could have a direct effect on M4 and RER B congestion.

      • dejv

        @dist:

        I don’t know Paris in person. The transfer times are those given by SNCF route planner. The point was that any transfer that requires trip by city transit is more inconvenient by order of magnitude to the transfer within station limits, especially if one doesn’t know the city system and has to pay attention to get to the right platform, board the correct metro train, not to miss transfer station, find platform of the other train and pay attention again to get out at the final station – all of this in busy crowded environment.

      • People with luggage and tourists are the most anti-transfer of travelers.

  • jim

    My memory is coming in to the Gare du Nord and having to get to the Gare Austerlitz. With luggage. Transfers across Paris are not pleasant.

  • This article seems to ignore the European concept of public service obligation contracts.
    http://en.wikipedia.org/wiki/Public_service_obligation

    SNCF should not be obligated to bear the burden of social justice, and social justice should not be a back door way of blocking new entrants to railway service in favour of national operators.

  • Pierre Bonardi

    Excellent article, except that it is too kind for Sarkozy when putting the blame on the EU commission. This privatisation frenzy is our government’s choice. Next on the list is the postal service (LaPoste).
    Contrary to many postal services, LaPoste makes a profit because it is also a bank. Letters are generally delivered overnight. For old people living in isolated houses, the postman’s yellow car is the only daily link with the outside world. In short, it is a service that everybody appreciates, works well and costs the taxpayer nothing. Common sense would say “if it ain’t broke, don’t fix it”.
    Unfortunately, in today’s Europe, ideology beats common sense.

  • armand

    This is one more illustration of the negative effects of liberalization of the public sectors. It has been proven that is many sectors, liberalization does not generate any competition but only an over-exploitation of the public infra-structures by some private companies with little maintenance. And, it shall be noticed that the public infra-structures (whether health care, transportation, telecommunication, etc.) have been paid by the french citizens during several decades are are suddenly privatized without any compensation to those who paid it. The worst in all this is that users have no extra benefits from privatizations, but instead pay higher fees for using them and get less services when living in the coutry side.

    After numerous years of liberal and sometimes ultra-liberal politics, Europe needs a much more Social politics that is really acting for European citizens and not only for a few private companies.

  • Piglet

    Japan is a perfect counter-example to all the anti-privatization posters. There are multiple private train companies and the whole system works perfectly. Most of the time there are convenient connexions between private networks. Each company has its own ticketing system but in Tokyo and Osaka area, there is an IC card system (Suica/Passmo in Tokyo area) which allows you to use most of the lines (train+bus).
    The main difference between the British and Japanese models is that in Japan, each company operates its own network and owns the tracks. Trains don’t usually use the tracks and stations of competing networks. However, I wouldn’t mind a mixed system where private companies would rent the use of tracks and stations (for long distance trips, for example).
    Let me give you an example. I live in a suburb city near Tokyo and I have nearby access to 3 train lines going to Tokyo: 2 lines from the former JR public entity (now privatized) and one line from a smaller private company. Both companies fight to attract more customers. Competition is good. There is nothing to fear about it.

    • Nathanael

      Nah, it’s really not a counter-example. First of all, the *RECENTLY* privatized JR divisions still enjoy a siamese-twin relationship with the government; give them 20 years and see what happens. If nothing bad happens, look very carefully at the regulatory environment!

      Second, look at the Japanese economic environment.

      It’s actually possible to have functioning privately owned transit, of course. If the roads aren’t subsidized to such a massive degree as to undercut it. In Japan road subsidies are large, but rail subsidies are also large (note… not usually going to the private companies….) and population density is so large that the road subsidies aren’t utterly distorting.

      So, y’know, go ahead and privatize the rails… in countries where the competing roads are tollways.

      I’m also OK with a mixed system where operators rent track and station access. It certainly doesn’t seem like Japan’s rail companies are act remotely like private operators when it comes to new ROW construction.

  • nick

    Sorry, I can´t read this and not say anything. (And sorry for my rusty English too).
    I dont know if its intentional or not (it usually is when comming from politicians), but there are many false ideas involving all theese public against private discussions.
    1) Using the British example is a level-1 trick to make something look better: choose the worst alternative to compare! Why dont you compare the french system with Germany?
    2) Basic and usually intentional confusion: if you need a public service to serve communities with losses payed by the central government or the regions, it doesnt mean that you necessarily need a monopoly. You can contract theese specific sevices with any company you want (even your own public company, without any tendering process, if you are such a fan of monopolies). The clear concept behind the german model is: everything must be in its place, and dont ¨compensate¨ losses with profit to transfer resources from a profitable sector to another. First you have your profit, wherever you can, and then you subsidize whatever you want.
    3) France is the center of europe only in a geographic way. So a well justified european goal will not make an exception in France just because they are not smart enough to make it work, or they feel their national pride is being offended if foreign companies enter their territory. The reason why the europeans want rail transport liberalized is because national companies are the biggest obstacle for international transport, which is one of the first priorities if the continent wants to be competitive.
    4) Just remembered another example that you should consider: Spain. By far the worst and most inefficient railway system in europe. Looks twice as good as others, but costs 1 times as much. Brilliant, right? Renfe is a public company where illogical decisions come from nowhere as if General Franco was still alive, and ther only objective is to use the company for their short-term political purposes. But it´s hard to hear about it because, as it is a public monopoly, losses, complaints from users and traffic levels never appear on the headlines, not even in Spain.
    5) Something to read for the author: DB Competition report 2010.

  • Chris

    Well, Nick, you’re English is pretty damn good. I too can’t resist very belatedly commentary on this stimulating thread.

    The one usual ‘unmentionable’ in UK rail privatisation was neutering the Unions. If this was a prime driver the result has certainly partially inhibited their capacity to cripple the whole network. But boy, was it really worth the ludicrous cost, already accurately mentioned?

    It’s always worth remembering that traditionally, the railways across Europe were used to help mop up unemployment and were therefore anything but commercial. But the world has moved on.

    If only BR had been privatised vertically, but with the business sectors or regions employing their own staff and budgets, but answerable to the controlling shareholder, HQ! This surely was possible. But it would probably not have avoided transfer of insurance to the private sector and all the attendant legal and health and safety backup.

    Chris

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